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The decrease in net loss for the third quarter 2007 is due to a 21%decrease in operating expenses to $3.7 million from $4.7 million in the thirdquarter 2006. Gross research and development expenses increased 16% to $2.7million compared to $2.3 million in the third quarter 2006. A decrease inresearch and development grant receivables to $0.2 million in the thirdquarter 2007 from $0.4 million in the third quarter 2006 impacted net researchand development expenses, which totaled $2.5 million compared to $1.9 millionin the third quarter 2007 and 2006, respectively. The increase in net researchand development expenses was more than offset by lower general andadministrative expenses, which decreased 56% to $1.2 million from $2.7 millionin the third quarter 2006. The decrease in operating expenses was partiallyoffset by a decrease in net other income to $0.2 million in the third quarter2007 from $0.5 million in the third quarter 2006, due primarily to a decreasein interest income.
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Gross research and development expenses in connection with Pharmos'leading clinical program, dextofisopam for irritable bowel syndrome (IBS),were $1.1 million for the quarter, during which the Company advanced itsongoing Phase 2b study of dextofisopam. The Phase 2b study, which commenced inJune 2007, is expected to enroll approximately 480 female patients withdiarrhea-predominant or alternating IBS at up to 55 participating U.S. centersover an 18-month period. Enrollment of patients in the study is currently onschedule.
Additional but relatively minimal research and development expenses wereincurred during the quarter in connection with the Company's commencement inJune 2007 of a Phase 2a clinical study of its topical NanoEmulsion drugdelivery technology formulated with 3% diclofenac as a treatment forosteoarthritis. Up to eight centers in Israel will enroll a total ofapproximately 126 subjects over a nine-month period. Gross expenses for otherresearch and development projects in early stages of development for the thirdquarter 2007 and 2006 were relatively unchanged at $0.9 million.
The decrease in general and administrative expenses is due primarily tolower professional fees and investor relations costs in connection with theCompany's acquisition of Vela Pharmaceuticals, which was ongoing in the thirdquarter 2006 and completed by the fourth quarter 2006.
For the year-to-date period ended September 30, 2007, Pharmos recorded anet loss of $12.9 million, or $0.51 per share compared to a net loss of $11.3million, or $0.60 per share in the same period in 2006. The increase in netloss is due to increased operating expenses and a decrease in net otherincome. Total operating expenses increased 7% to $13.7 million in the currentyear-to-date period from $12.8 million in the same period in 2006, primarilydue to increased research and development expenses and lower grantreceivables. Gross research and development expenses increased 41% to $9.3million from $6.6 million, reflecting increased clinical trial-relatedactivities. Grant receivables decreased to $0.8 million from $1.1 million inthe same period in 2006. Higher research and development expenses werepartially offset by a 29% decrease in general and administrative expenses to$5.0 million from $7.0 million due to the aforementioned lower professionalfees and investor relations costs in connection with the Company's acquisitionof Vela Pharmaceuticals in 2006, as well as to a reduction in insurance costsduring the first half 2007. These reductions are offs
